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Hungarian parties will keep talking on new PM

  Hungarian parties agreed to resume talks on a new prime minister later this week, with banker György Surányi seen as frontrunner. But the president called for early elections to end the political gridlock.

The opposition Free Democrats (SzDSz), whose votes are vital to elect a new premier, said they could accept Surányi, a former central bank governor, to replace Prime Minister Ferenc Gyurcsány, who is stepping down to let a fresh leader tackle the economic crisis. SzDSz said they were waiting for Surányi to decide whether he would accept a nomination.

Hungary had to take a $25.1 billion IMF-led rescue package last October to avert financial meltdown. It needs to make more spending cuts and launch reforms as soon as possible to put the economy back on a sustainable track, analysts say.

Ildikó Lendvai, the leader of the Socialist group in parliament, said negotiations with the Free Democrats would resume on Thursday or Friday. The Socialists are the ruling party but they do not have a majority in parliament.

“We would like negotiations to close as fast as possible,” Free Democrat leader Gábor Fodor told reporters. “There is a candidate. It is a separate question that the candidate will have to say the final yes or no. I hope he will say yes,” he added.

Surányi told Reuters earlier in the day that he wanted to seek support from all parliamentary parties, but the main opposition party Fidesz said it wants early elections and would not support any new government or program.

The Socialists are seeking agreement with opposition parties, mainly the Free Democrats and the Democratic Forum (MDF), to choose a new leader and a strategy to pull Hungary out of its worst recession since the early 1990s.

TRYING TO AVOID ELECTIONS

The Socialists on Tuesday proposed three candidates for prime minister: Surányi, former head of the Hungarian Academy of Sciences Ferenc Glatz, and András Vértes, head of the GKI economic research institute.

Hungarian President László Sólyom said in a rare television interview that early elections would be the best way for Hungary to have a stable government to deal with its financial troubles.

“The situation is such that only early parliamentary elections can provide a chance to establish a stable government with broad support, a government which has sufficient backing to implement a long-term program spanning several years to lead the country out of the crisis,” he told public television MTV.

The Socialists want opposition backing to pass a vote of no confidence in the current prime minister and approve a new one next month, thus avoiding an election which Fidesz, ahead in the opinion polls, would most likely win.

The Free Democrats have said that if there is no agreement on a credible candidate and program, early elections cannot be avoided. If parliament dissolves itself, new elections must be held within three months.

Fidesz spokesman Peter Szijjártó told Reuters: “A government without authorization from voters is temporary, weak and illegitimate.”

Free Democrat party president Gábor Fodor told public radio MR1: “I would like to make it clear that out of the three candidates György Surányi is acceptable for us.” He said there were question marks surrounding the other two candidates but did not elaborate.

Surányi, 55, regional head of Italy’s Intesa Sanpaolo SpA and twice governor of the central bank in the 1990s, would be well suited to tackle economic problems, analysts said.

He started his second term in 1995 when Hungary launched a package of measures which he co-authored to cut huge budget and current account deficits, and save Hungary from defaulting on its debts. Two years later the economy was on a track of balanced growth at close to 5%.

“Obviously Surányi is the best candidate. (He) has a clear vision, the experience and is able to fight if he sees a chance. He is the one whom I would not regard as a puppet,” said János Samu, analyst at Concorde Securities in Budapest. (Reuters)